In Business News this week: Czech government approves savings measures of 8.6 billion crowns; a new pipeline opens providing alternate route for Russian gas; car maker Škoda Auto posts record sales; most Czech joint-stock companies are anonymously owned; Budvar wins major trademark battle in UK.
Czech government approves savings measures of 8.6 billion
The Czech government this week approved a series of spending cuts and savings measures totalling around 8.6 billion crowns. These include a plan to merge the Ministry of Transport with that of industry and trade, the sales of redundant state property and the privatization of some state-owned operations. In 2014, the government plans to save another 12 billion crowns with the aim of bringing the state budget deficit below 3 percent of gross domestic product. Last year, the budget’s deficit reached 3.1 percent of GDP.
New Gazelle pipeline opens to provide alternate route for Russian gas imports
A new pipelined named Gazelle opened in the Czech Republic on Monday to provide an alternative route for Russian gas imports. The 166-km long pipeline, whose construction cost 10 billion crowns, was built by a Czech subsidiary of the German firm RWE Transgas. It serves as link between the Czech Republic and the OPAL pipeline which is connected to the Nord Stream pipeline transporting natural gas from Russia to Germany. The new pipeline should enhance the Czech Republic’s energy security as it will no longer depend on a transit route through Ukraine which in the past was often blocked by trade disputes with Russia.
Analysis: most Czech joint-stocked companies anonymously owned
More than 53 percent of joint-stock companies registered in the Czech Republic are owned through bearer shares which means their ownership structure is non-transparent, according to analysis by the ČEKIA consultancy released this week. Firms prefer to issue bearer shares due to their simple transferability and low administrative costs, the firm said. However, bearer shares are also abused for corruption and money laundering. The Czech Republic is one of the few countries in the world that still allow this form of shares, and attempts to clamp down on them have been futile.
Škoda posts record sales for 2012
The German-owned, Czech based car maker Škoda Auto has posted record sales for 2012. The car manufacture sold 939,200 cars worldwide last year, which represents an increase of 6.8 percent compared to the previous year. Škoda’s sales grew in all markets except in western Europe; in Russia, the sales soared by 33.7 percent while China saw a 7.1 percent increase. Last month, Škoda unveiled its new Octavia model which the firm hopes will make the list of the world’s top ten best-selling cars.
Budvar wins major trademark battle in UK
The Czech state-owned beer producer Budějovický Budvar has claimed victory in a major trademark battle in the UK. Britain’s Supreme Court rejected a request by Budvar’s competitor, Anheuser-Busch Inbev, to block Budvar from selling its beer under the Budweiser trademark in the country. The ruling is the final verdict in the case. Budvar’s CEO, Jiří Boček, said the verdict was crucial for the Czech brewery given the importance of the UK market where Budvar annually sells some 80 million British pounds worth of beer. Trademark disputes between Budvar and its rival continue in another 11 countries around the world.